TSL projects better volumes
TSL Limited says the onset of the tobacco marketing season is expected to improve volumes through the Group’s tobacco related operations while continuing to undertake key strategic initiatives in pursuit of the company’s “moving Agriculture” strategy.
According to the Tobacco Industry and Marketing Board (TIMB), the 2022 Tobacco Marketing Season kicks off on the 30th of March 2022 for auction floors and Thursday the 31st of March for contract floors.
The Group in a trading update for the quarter ended 31 January 2022, said Tobacco Sales
Floor is well advanced in preparation for the tobacco marketing season.
“The business is setting up a new decentralised floor in Mvurwi to augment the Harare, Karoi and Marondera floors. This is expected to improve tobacco volumes to be handled in the year,” the company said.
It noted that Propak Hessian commenced distribution of tobacco packaging materials during the quarter and volumes of hessian wraps are ahead of prior year whilst tobacco paper is 16 percent above the same period last year.
“The business is adequately stocked for the season.” TSL said Agricura’s volumes across all major product lines were depressed against prior year due to the late start of the rainy season which resulted in a shift in volume uptake.
“However, there was significant volume growth in fertilisers compared to last year due to availability of stocks and favourable pricing,” the company noted.
In the farming operations, TSL said tobacco, maize and soya bean crops are growing well and yields are expected to be satisfactory.
It said that the banana plantation recovered from the prior year drought resulting in improved yields.
In terms of overall business performance, Group revenues in the first quarter are mainly from supply of agro-inputs, provision of logistics services and real estate services primarily to the agriculture industry.
As a result, revenue growth of 72 percent and 69 percent was recorded in inflation adjusted and historical terms respectively for the quarter.
The company said preservation of shareholder value continues to be a key priority and the group started executing strategic initiatives, which will be partly funded from borrowings.
On the group’s Logistics Operations, the rail initiative from Maputo to Harare positively impacted volumes in the General Cargo and Ports divisions although shortages of empty containers persisted.
Distribution volumes are 49 percent behind last year as most customers’ volumes slowed down.
Premier’s forklift hours are down 9 percent in the quarter due to slowed activity among major clients.
Avis car rental days are 74 percent ahead of prior year as lockdown restrictions were less stringent in the current year.
TSL said performance in the real estate operation remains satisfactory and space leased out was 10 percent above prior year due to the contribution of the new warehouse that was under construction in prior year.-ebusinessweekly
